6 Highly Successful Business Models

If you have dreams of one day owning a business, there are many things you will need to think of. First, you need a fabulous idea for a product or service that consumers will be clamoring for. Ideally, the competition won’t be too fierce so that you can get your foot in the door. But before you can get to that point, you need to think about the type of business model you’ll be using. While this is something that many entrepreneurs don’t think of until much later in the game, the business model you choose will dictate the path you take.

For those hoping to start a business one day or those with just a passing interest in business ownership, here’s a look at six highly successful business models.

Franchise

Not everyone has a brilliant idea for a business, but that doesn’t mean they don’t want to get in on the action. This is exactly why the franchise business model makes a lot of sense. A franchise allows you to purchase a location of an already existing business and brand. Unlike a typical startup, the name recognition with a franchise is already there, and franchise owners can tap into all kinds of helpful resources that will help their location succeed.

Franchises vary in price, with the bigger, more well-known ones requiring a much higher investment. However, this model is perfect for entrepreneurs who are risk-averse and aren’t keen on going about things on their own.

Affiliate Marketing

Affiliate marketing is something you may also be familiar with, as this one is much more common nowadays. It seems like just about every social media and online influencer uses affiliate marketing links. The great thing about this business model is that it’s a win-win, as both the influencer and the viewer or follower get something out of the deal.

Online influencers often ask their viewers and followers to “check the links below” to take advantage of specific promotions and exclusive deals. Whether it’s casinos.com listing the welcome bonuses of the top online casinos or a travel blog recommending boutique hotels in Paris, affiliate marketing allows followers to save money and influencers to earn a set rate or commission for each person who signs up and spends. Influencers can make pretty good money through affiliate marketing and links alone.

Subscription

The subscription model is not only interesting but can also be lucrative when done properly. The goal is to sign people up for subscriptions that automatically charge them for a product on a pre-set subscription term. An example of this can be a monthly beauty box that provides people with a selection of trending products at a set price.

Advertising for these subscription services is essential, especially because this can be a crowded market. However, you can find subscription services in just about every category, allowing you to be creative. Product procurement is very important, as you need to offer items that entice your customers to stick around.

Subscription services are sent directly to the customer by mail, so there’s no need for a retail location. A professional website is needed, and some subscription services also offer an e-commerce section on their site.

E-Commerce

E-commerce is a business model that is no longer new, but its allure hasn’t worn off. If anything, this business model has only grown in popularity. It’s quite common for businesses to combine one or several of the other business models with an e-commerce platform.

This model allows companies to make their products available online, opening up their customer base to domestic and potentially international markets. Factors like inventory management, procurement, and shipping play into just how many places you can ship to, but they can certainly allow businesses to grow at a fast pace.

The big drawback of e-commerce is competition. As there are countless businesses that offer products online, you are not just competing with the local industry but also the worldwide industry. This means you need an extremely smart marketing plan, an excellent website, in-demand products, and competitive pricing.

Marketplace

The marketplace model is an interesting one that opens the door to smaller business owners who don’t want to build an e-commerce site or have a brick-and-mortar retail location. A marketplace is a centralized platform wherein all kinds of business owners can list their products for sale. There is no third party, meaning sales are made directly to the customer.

The platform provides a safe and reliable location wherein customers will feel secure making an online purchase. The platform also takes care of processing payments.

It’s usually pretty easy to set up a storefront or list products on a marketplace site, but be aware the platform does usually charge fees.

Retailer

This is one of the more traditional business models, but it’s still a viable path for many businesses. A retail model means you have a storefront wherein you sell products to customers who physically shop at your store. Many business owners start with just one location. As sales grow and demand increases, they expand by opening other locations. Consider a worldwide massive retailer like Walmart; it too had to start somewhere.

One thing to be aware of with this model is that there is a lot of overhead, even if you only have one location. You need to stock the store with products and keep the shelves stocked, hire staff, rent or purchase a property, pay for insurance and utilities, and so much more.

Many Great Business Models Exist

This is just a small look at the many business models that exist today. Although they all have their challenges, it’s an exciting time to be an entrepreneur and budding business owner, as you can tailor your goals and dreams to a specific model.